Market news
20.12.2010, 09:28

Forex: weekly review

The dollar reached the strongest against the euro in two weeks as Treasury yields were near seven-month highs, boosting demand for U.S. assets, and on concern the European Union summit didn’t do enough to keep sovereign-debt problems from spreading across the region.
The euro earlier rose after EU leaders agreed to create a mechanism to contain future debt shocks and German business confidence unexpectedly climbed. Beyond the permanent debt- crisis mechanism in 2013, the leaders struggled to bridge divisions about immediate steps to stabilize bond markets. The index of U.S. leading economic indicators increased in November by the most in eight months.

Germany, the biggest contributor to Europe’s bailouts of Greece and Ireland, pushed through a proposal that would allow financial aid “if indispensable” to underpin the euro and may force bondholders to bear some costs of future rescues.
German Chancellor Angela Merkel ruled out putting more money on the table, retooling the post-Greek rescue European Financial Stability Facility to enable it to buy troubled government bonds, or further entwining Europe’s economies through joint bond sales.
U.K. Prime Minister David Cameron said his country won’t pay into the euro-region bailout mechanism and said he wanted the European Union’s budget frozen as he sought to distance Britain from the region’s policies.
“We’re looking at a situation where the U.S. dollar should do a little bit better,” said Shaun Osborne, chief currency strategist at Toronto-Dominion Bank’s TD Securities unit in Toronto. “The euro probably still has further to fall considering the still quite significant sovereign fiscal challenges that we have in the euro zone.”
“We’re a little bit disappointed at their inability to approach the broad solution to the sovereign debt crisis that’s clearly needed,” Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York, said in an interview on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene. “ The market is afraid of a financial rupture in the euro zone.”
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 109.9 from 109.3 in November. That’s the highest since records for reunified Germany began in 1991. Economists predicted a drop to 109.
Moody’s Investors Service cut Ireland’s credit rating by five levels to Baa1 after the government was forced to ask for external aid last month, staggered by losses in the banking system.
“The Irish government’s financial strength could decline further if economic growth were to be weaker than currently projected or the cost of stabilizing the banking system turn out to be higher than currently forecast,” Moody’s said.
The yen headed for a weekly decline against a basket of 10 currencies as the MSCI Asia Pacific Index of regional shares rose. People’s Bank of China Governor Zhou Xiaochuan said his nation won’t increase reserve ratios and interest rates at the same time, the South China Morning Post reported, citing a speech at Peking University.

Zhou said yesterday that increases in banks’ mandatory reserves don’t rule out interest rate increases, the Hong Kong- based English-language newspaper reported today.
“Risk sentiment remains firm, supporting higher-yielding currencies against developed nations’ currencies,” said Koji Fukaya, chief currency strategist in Tokyo at Credit Suisse Group AG. “Currencies should strengthen against the yen.”

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at

Live Chat E-mail
Choose your language / location